Union Budget FY26: India Reduces Import Duties on Motorcycles, Boosting Premium Segment

Nirmala Sitharaman India Reduces Import Duties on Motorcycles

India’s Finance Minister, Nirmala Sitharaman, unveiled the fiscal year 2026 budget, which includes significant revisions to import duties on motorcycles. The government has lowered the basic customs duty (BCD) across the board for completely built units (CBU), semi-knocked down (SKD), and completely knocked down (CKD) motorcycle imports.

For motorcycles with engine capacities under 1600cc, the BCD on CBUs has been reduced from 50% to 40%, for SKDs from 25% to 20%, and for CKDs from 15% to 10%. The same percentage reductions apply to motorcycles with engine capacities of 1600cc and above: CBUs now face a 30% duty (down from 50%), SKDs remain at 20% (down from 25%), and CKDs are at 10% (down from 15%).

These changes are expected to make premium motorcycles more affordable in India, potentially driving sales growth in that segment.

While import duties on some cars, other vehicles, and even yachts were also lowered, the actual impact may be negligible due to the offsetting Agriculture Infrastructure and Development Cess (AIDC).

In a move aimed at bolstering domestic electric vehicle (EV) battery production, the government has eliminated the BCD on key components like lithium-ion battery waste, cobalt powder scrap, lead and zinc waste and scrap, and twelve other crucial minerals.

The Indian auto industry has responded positively to the budget announcements. Anish Shah, MD of Mahindra & Mahindra and Group CEO of the Mahindra Group, praised the budget’s focus on stimulating consumer spending through tax adjustments. He believes these measures will increase disposable income, encouraging private sector investment.


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